[Page 11 of the Annual Report]

Reports of Management and Independant Accountants

Report of Management
The management of Gehl Company is responsible for the preparation and
integrity of all financial statements and other information contained in this
annual report.  The financial statements have been prepared by the Company in
conformity with generally accepted accounting principles appropriate in the
circumstances.  Such statements necessarily include amounts based on the best
estimates and judgments of management after giving due consideration to
materiality.

The Company maintains an internal control system designed to provide
reasonable assurance that transactions are properly recorded and executed in
accordance with management's authorization and that assets are safeguarded
from loss or unauthorized use. The internal control system is augmented by
careful selection and training of qualified employees, proper division of
responsibilities, and the development and dissemination of written policies
and procedures.

The Board of Directors elects, from among its members, an Audit Committee,
consisting entirely of outside directors, which is responsible for reviewing
and evaluating the overall performance of the Company's financial reporting
and accounting practices and for recommending appointment of the independent
accountants. The Audit Committee meets periodically with management and the
independent accountants to discuss any and all matters within the Committee's
responsibilities.  The independent accountants have free access to the
Committee, without the presence of management if so requested.

The Company's financial statements have been audited by PricewaterhouseCoopers
LLP, independent accountants, whose report also appears on this page.
Included in the audit process was a review of the Company's system of internal
controls.  PricewaterhouseCoopers LLP annually provides to management and the
Audit Committee recommendations to improve internal controls or enhance
administrative procedures.


William D. Gehl
Chairman of the Board of Directors,
President and Chief Executive Officer


Kenneth P. Hahn
Vice President of Finance, Treasurer
and Chief Financial Officer

Report of Independent Accountants

To the Board of Directors and
Shareholders of Gehl Company

In our opinion, the statements appearing on pages 18 through 27 of this report
present fairly, in all material respects, the financial position of Gehl
Company and its subsidiaries at December 31, 2000 and December 31, 1999, and
the results of their operations and their cash flows for each of the three
years in the period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States of America.  These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States  of America, which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP
Milwaukee, Wisconsin
February 12, 2001

<PAGE>

[Pages 12 through 17 of the Annual Report]

                      Management's Discussion and Analysis
Overview

     The Company's net income in 2000 was $9.7 million, or $1.72 per diluted
share, compared with $20.2 million, or $3.17 per diluted share, in 1999.  The
2000 net income included an after-tax gain of $.5 million, or $.10 per diluted
share, recognized on the disposal of a former branch service center.  Basic
earnings per share for 2000 were $1.76 versus $3.29 reported in 1999.  Net
sales in 2000 of $258.1 million were 11.5% below the $291.4 million in 1999.
The reduced sales levels were due primarily to the slowing U.S. economy, the
weak Euro abroad, effects of increased interest rates on domestic housing
starts, low milk prices and high fuel costs.  Construction equipment sales in
2000 of $151.1 million were 13% below 1999 levels, while agriculture equipment
sales in 2000 of $107.0 million were 9% below 1999 levels. Construction
equipment comprised 59% of Company net sales in 2000 versus 60% in 1999.
Agriculture equipment sales were 41% of Company net sales in 2000, versus 40%
in 1999.

       Income from operations in 2000 was $22.0 million, with construction
equipment accounting for $14.0 million, while agriculture equipment
contributed the balance of $8.0 million.  Interest expense in 2000 increased
$1.6 million, to $4.7 million.  Other expense, net, consisting primarily of
the costs of selling finance contracts receivable, which was $2.2 million in
1999, increased in 2000 to $4.1 million.

     The Company's total debt increased to $61.1 million at December 31, 2000
from $31.6 million at December 31, 1999.  The increase was primarily due to
the funding of capital expenditure projects, the repurchase of $5.9 million of
the Company's stock during 2000 and an increase in working capital, primarily
inventories and finance contracts receivables.  The Company's ratio of debt to
total capital was 37.2% at December 31, 2000, as compared with 24.5% at
December 31, 1999.

     After seven consecutive years of progressively increasing sales and
earnings, the slowdown of the U.S. economy, which began in the second half of
2000, negatively impacted the Company's business.  The Company's management
continues to adjust to the rapidly changing economic environment by reducing
headcount and decreasing production levels to meet lowered demand.  The
Company also continues to position itself and make investments for long-term
growth, all as part of the ongoing efforts to enhance shareholder value.

     The Company has adopted the Emerging Issues Task Force Issue No. 00-10,
"Accounting for Shipping and Handling Fees and Costs", which is effective for
the year ended December 31, 2000.  In conjunction with such adoption, the
Company has reclassified shipping and handling fees and costs for both current
and prior periods into net sales and cost of sales in the accompanying
statements of income.  Prior to the adoption, the Company recorded such fees
and costs on a net basis as a component of selling, general and administrative
expenses.

Results of Operations
2000 vs. 1999
Net Sales:

 ($ millions)             2000     1999     1998    1997    1996

 Construction Equipment   $151.1   $173.6  $159.2  $103.7    $72.3
 Agriculture Equipment     107.0    117.8   108.4    97.3     90.6
                          ------   ------  ------  ------   ------
      Total               $258.1   $291.4  $267.6  $201.0   $162.9

  (% of total)

 Construction Equipment   58.5%    59.6%   59.5%   51.6%    44.4%
 Agriculture Equipment    41.5%    40.4%   40.5%   48.4%    55.6%

     Net sales for 2000 of $258.1 million were 11.5% below the $291.4 million
of net sales in 1999.  Construction equipment net sales in 2000 were $151.1
million, 13% below the $173.6 million in 1999. The decline in construction
equipment net sales from the 1999 levels reflected lower shipments and retail
sales of telescopic handlers consistent with an industry-wide reduced demand
for telescopic handler equipment. Industry-wide retail sales of telescopic
handlers in North America in 2000 were reported to be 15% to 20% below last
year's levels.  The industry-wide reduced demand for telescopic handlers is
primarily a result of: a) a decline in residential construction activity,
especially within the U.S. housing sector, which was adversely impacted by
increased interest rates, and b) reduced demand for new units by rental
customers due to low equipment rental rates and adequate levels of units in
rental fleet inventory.  In addition, a reduction in overseas demand for skid
loaders, resulting in part from the continued weakness of the Euro, further
contributed to the reduction from 1999 sales levels.  Offsetting these
negative demand factors, the Company realized a positive contribution in 2000
from shipments of new equipment, including compact excavators and mini-
loaders, introduced within the past eighteen months.

     Agriculture equipment net sales in 2000 were $107.0 million, 9% below the
$117.8 million in 1999 due primarily to reduced shipments of forage harvesting
equipment, skid loaders and manure handling equipment.  Partially offsetting
this reduction  were increased sales of disc mower conditioners as a result of
new product offerings in 2000.  The continuation of record low milk prices
throughout 2000 and the effect of higher interest rates and fuel costs
contributed to the overall decline in demand for agricultural equipment by
farmers.

     Of the Company's total net sales reported for 2000, $34.4 million
represented sales made outside the United States compared with $39.8 million
in 1999. The decrease in international sales was due, in part, to decreased
orders from Europe due to the decline in the value of the Euro versus the U.S.
dollar and to the economic slowdown in Latin America and Australia.

 Gross Profit:
     Gross profit in 2000 was $68.0 million as compared to $80.6 million in
1999. Gross profit as a percent of net sales decreased in 2000 to 26.4% from
27.6% in 1999.

     Construction equipment gross profit as a percent of net sales for 2000
decreased to 24.3% from 26.8% in 1999.  The decrease in construction equipment
gross margin was a function of: a) decreased telescopic handler sales, which
sales are generally at higher gross margins than other construction equipment,
b) increased industry competition which has resulted in overall gross margin
compression, c) increased compact excavator shipments, which sales are
generally at lower gross margins than other construction equipment, d) reduced
production levels, and e) lower gross margins on product shipped into Europe
due to the  weakening of the Euro.  Gross profit as a percent of net sales for
agriculture equipment increased to 29.2% for 2000 from 28.9% for 1999.

Selling, General and Administrative Expenses:
     Selling, general and administrative expenses increased $.5 million, or
1%, to $46.0 million in 2000 as compared with $45.5 million in 1999 reflecting
increased sales related costs incurred, in part, in response to competitive
market conditions, and continued investments in longer range revenue enhancing
projects such as new product development, improved parts distribution, e-
commerce initiatives and enterprise resource planning (ERP) systems.  As a
percent of net sales, selling, general and administrative expenses in 2000
increased to 17.8% from 15.6% in 1999.

Income from Operations:

 ($ millions)                     2000   1999    1998   1997   1996

 Construction Equipment          $14.0  $23.7   $19.4  $16.3  $12.9
 Agriculture Equipment             8.0   11.4     7.9    5.5    2.6
                                 -----  -----   -----  -----  -----
      Total                      $22.0  $35.1   $27.3  $21.8  $15.5

     Due primarily to lower net sales volume combined with gross margin
compression and a slight increase in operating expenses, income from
operations in 2000 declined from 1999 levels.  Construction equipment income
from operations decreased in 2000 to $14.0 million from $23.7 million in 1999.
The reduction was primarily due to the impact of reduced construction
equipment sales volume and a contraction in gross margin levels.  Agriculture
equipment income from operations decreased in 2000 to $8.0 million from $11.4
million in 1999 due primarily to lower agriculture equipment sales volume
coupled with a slight increase in selling, general and administrative
expenses.

Interest Expense:
     Interest expense increased $1.6 million, to $4.7 million, in 2000
compared to $3.1 million in 1999. The increase was a result of an increase in
average debt outstanding to $55.1 million for 2000 from $34.6 million in 1999,
combined with an increase in the average rate of interest paid by the Company
in 2000 to 8.7% from 7.9% in 1999.  The increase in debt was primarily due to
the funding of capital expenditure projects, the repurchase of $5.9 million of
the Company's stock during 2000 and an increase in working capital, primarily
inventories and finance contracts receivable.

Other (expense) income, net:
     Other expense, net increased $1.9 million to $4.1 million in 2000 from
$2.2 million in 1999.  This was primarily a result of selling $21.4 million
more retail finance contracts to third parties during 2000 than in 1999,
combined with lower finance rates offered to Gehl finance customers and
increasing discount rates used in selling finance contracts to third parties
resulting from the general trend of overall interest rates.  In addition,
increased foreign currency exchange transaction expenses were incurred in
2000, as a result of the weak Euro and Canadian dollar.  Offsetting these
items, was a pre-tax $.8 million gain on the disposal of a former branch
service center.

Provision for Income Taxes:
     The Company's effective income tax rate of 35.0% for 2000 was reduced
from 35.5% for 1999.

Net Income:
     Net income in 2000 of $9.7 million compared to $20.2 million of net
income in 1999.  Diluted earnings per share were $1.72 in 2000 compared to
$3.17 in 1999.  Basic earnings per share were $1.76 in 2000 versus $3.29 in
1999.  No dividends were declared in 2000 on the Company's common stock.

1999 vs. 1998
Net Sales:
     Net sales for 1999 of $291.4 million were 9% greater than the $267.6
million of net sales in 1998.  Construction equipment net sales in 1999 were
$173.6 million, 9% higher than net sales of $159.2 million in 1998.
Construction equipment net sales in 1999 benefited from increased shipments of
telescopic handler sales and shipments of the new compact excavator product
line introduced in mid-1999.  Shipments of construction skid loaders declined
slightly from 1998 levels due primarily to certain large customers deferring
fourth quarter purchases until the new year.

     Agriculture equipment net sales in 1999 increased 9% to $117.8 million
from $108.4 million in 1998.  The increase was due primarily to higher skid
loader and forage harvesting equipment shipments which more than offset
reduced levels of shipments of haytools and feedmaking equipment.

     Of the Company's total net sales reported for 1999, $39.8 million
represented sales made outside the United States compared with $41.4 million
in 1998. The decrease in international sales was due to the economic slowdown
in the Far East and Australia.

Gross Profit:
     Gross profit in 1999 of $80.6 million was 13% higher than 1998's $71.4
million. Gross profit as a percent of net sales increased in 1999 to 27.6%
from 26.7% in 1998.

     Construction equipment gross profit as a percent of net sales for 1999
increased to 26.8% from 25.4% in 1998.  This increase was due primarily to:
a) increased telescopic handler sales, which sales are at higher gross margins
than other construction equipment; b) improved efficiencies at the
manufacturing plants; and c) export sales, typically made at lower gross
margins than domestic sales, constituting a smaller percentage of sales in
1999 than in 1998.

     Agriculture equipment 1999 gross profit as a percent of net sales
increased to 28.9% from 28.5% in 1998.  This increase was due primarily to:
a) the favorable impact of a change in the mix of products shipped in 1999
versus products shipped in 1998; b) higher production levels in 1999 over 1998
generating increased absorption of factory overhead; and c) improved
efficiencies realized at the manufacturing plants.

Selling, General and Administrative Expenses:
     Selling, general and administrative expenses increased $1.4 million, or
3%, to $45.5 million in 1999 as compared with $44.1 million in 1998 due to
continued investment in engineering and sales related activities, as well as
sales volume increases.  As a percent of net sales, however, selling, general
and administrative expenses in 1999 decreased to 15.6% from 16.5% in 1998.

Income from Operations:
     Due primarily to higher net sales volume combined with controlled
operating expense spending, income from operations in 1999 increased 29% from
1998 to $35.1 million.  Construction equipment income from operations
increased 22% in 1999 to $23.7 million from $19.4 million in 1998.   The
improvement was primarily due to the impact of increased construction
equipment sales volume and improved gross margin levels which were offset, in
part, by increased expenditures in selling, general and administrative costs.
Agriculture equipment income from operations increased 44% in 1999 to $11.4
million from $7.9 million in 1998.  Increased agriculture equipment sales
volume coupled with an improved gross margin percentage and slightly reduced
selling, general and administrative expense levels were the primary factors in
generating this increase.

Interest Expense:
     Interest expense decreased $943,000, to $3.1 million, due to a lower
level of average debt outstanding during 1999 than 1998 combined with a
decrease in the average rate of interest paid by the Company in 1999 to 7.9%
from 8.0% in 1998.

Other (expense) income, net:
     Other expense, net increased $1.0 million to $2.2 million in 1999 from
$1.2 million in 1998.  This was primarily a result of selling $21.7 million
more retail finance contracts to third parties during 1999 than in 1998,
combined with lower finance rates offered to Gehl finance customers and
increasing discount rates used in selling finance contracts to third parties
resulting from the general trend of overall interest rates.

Provision for Income Taxes:
     The Company's effective income tax rate of 35.5% for 1999 was consistent
with 1998.

Net Income:
     Net income in 1999 of $20.2 million was 32% higher than 1998's $15.3
million of net income.  Diluted earnings per share were $3.17 in 1999 compared
to $2.29 in 1998.  Basic earnings per share were $3.29 in 1999 versus $2.39 in
1998.  No dividends were declared in 1999 on the Company's common stock.

Liquidity and Capital Resources

Working Capital:
     The Company's working capital increased to $93.0 million at December 31,
2000 from $69.5 million twelve months earlier.  The increase was primarily the
result of an increase in retail finance contracts receivables and inventories,
combined with a reduction in current liabilities.  The Company's current ratio
at December 31, 2000 increased  to 2.9 to 1 from 2.2 to 1 at the same time a
year ago.  Cash on hand at December 31, 2000 was $2.6 million as compared to
$1.0 million a year earlier.

Cash Flow (Used for) Provided by Operating Activities:
     In 2000, cash flow used for operating activities was $7.1 million as
compared to $25.0 million of cash flow provided by operating activities in
1999.  The primary differences between the results in 2000 and 1999 include:
a) net income in 2000 of $9.7 million compared to $20.2 million in 1999, b) an
aggregate increase in accounts receivables, finance contracts receivables and
inventories of $18.5 million in 2000 compared to $4.7 million in 1999, and c)
a reduction in accrued liabilities of $5.2 million in 2000 compared to an
increase of $2.9 million in 1999.

Accounts Receivable:
     The Company's net accounts receivable increased $1.0 million during 2000.
Agriculture equipment accounts receivable at year-end 2000 decreased $.4
million from a year earlier, while construction equipment accounts receivables
increased $1.4 million over the same period.  The increase results from a
general slowdown of retail sales levels at the dealers, combined with a shift
away from dealers paying earlier, in better economic times, in order to take
advantage of cash discount programs.

Finance Contracts Receivable:
     Finance contracts receivable increased $7.1 million to $26.5 million at
December 31, 2000.  The combined portfolio of owned and sold-but-serviced
finance contracts receivable was $150.0 million at December 31, 2000 as
compared to $110.6 million at year-end 1999.  (See "Sales of Finance Contracts
Receivable" following).

Inventories:
     The increase in inventories at December 31, 2000 compared to the prior
year reflects the impacts of new products offered since mid-1999 combined with
an inventory build-up resulting from the slowing sales trend.  The Company has
adjusted production levels in an attempt to reduce inventory in accordance
with current market demand.

Capital Expenditures:

 ($ thousands)                2000     1999    1998    1997    1996

 Capital Expenditures       $12,577  $7,281  $3,051  $8,718   $3,837

 Depreciation                $4,885  $4,329  $3,941  $2,955   $2,438

     The Company expended $12.6 million for property, plant and equipment in
2000.  Approximately $8.6 million was spent to complete the expansion of the
Company's South Dakota skid loader manufacturing facility and add certain
equipment to improve the manufacturing process and to increase production
capacity for skid loaders.  The majority of the remaining 2000 expenditures
were incurred to upgrade and maintain machinery and equipment, to enhance
capability, to improve productivity, to improve product quality and to install
the Company's enterprise resource planning (ERP) system. There were no
significant outstanding commitments for capital items at December 31, 2000.
The Company plans to make up to $4.0 million in capital expenditures in 2001,
including approximately $1.1 million to complete implementation of the ERP
system. The Company believes its present facilities will be sufficient to
provide adequate capacity for its operations in 2001.

Debt and Equity:

 December 31,                2000    1999   1998   1997   1996
 ($ millions)

 Total Debt                  $61.1  $31.6   $29.5  $49.7  $19.4

 Shareholders' Equity       $103.0  $97.4   $94.1  $77.6  $64.8

 % Total Debt to
    Total Capitalization     37.2%  24.5%   23.9%  39.1%  23.0%

     At December 31, 2000, shareholders' equity had increased $5.6 million to
$103.0 million from $97.4 million a year earlier.  This increase primarily
reflected the impact of the year's net income of $9.7 million partially offset
by the $5.9 million expended to repurchase Company stock. As a result of the
$29.5 million increase in outstanding debt, the Company's capitalization ratio
increased to 37.2% at December 31, 2000.

     In March 2000, the Company's Board of Directors authorized a repurchase
plan providing for the repurchase of up to an additional 325,000 shares of the
Company's outstanding common stock.  As of December 31, 2000, 271,900 shares
had been repurchased in the open market under this authorization at an
aggregate cost of $3.8 million.  In March 1999, a repurchase plan relating to
up to 325,000 shares of the Company's outstanding common stock was authorized.
As of April 1, 2000, all of the authorized shares under that plan had been
repurchased at an aggregate cost of $5.8 million.

Borrowing Arrangements (See also Note 5 of Notes to Consolidated Financial
Statements):
     The Company maintains a $75 million line of credit facility (the
"Facility") which expires December 31, 2002, and is subject to a borrowing
base related to the Company's accounts receivable, finance contracts
receivable and inventories.  The interest rate paid on loans denominated in
U.S. dollars is 2.00% above the London Interbank Offered Rate for one-month
deposits ("LIBOR").  In Canada, where the Company may borrow up to $5.5
million, the interest rate is 2.50% above the Canadian one-month bankers'
acceptance rates ("BA Rate").  At December 31, 2000, the Company had unused
borrowing capacity of $20.2 million under the Facility, versus $49.8 million a
year earlier.  Management believes the Facility provides sufficient borrowing
capacity for the Company to finance its operations for the foreseeable future.

     The Company also has outstanding $8.4 million of 9% industrial
development bonds with a 2010 final maturity; repayments commence in 2005.

Sales of Finance Contracts Receivable:
     The sale of finance contracts is an important component of the Company's
overall liquidity.  The Company has arrangements with several financial
institutions and financial service companies to sell, with recourse, its
finance contracts receivable.  The Company continues to service substantially
all contracts whether or not sold.  At December 31, 2000, the Company serviced
$150.0 million of such contracts, of which $121.5 million were owned by third
parties.  Losses on finance contracts due to customer nonperformance were
$245,000 in 2000 as compared to $296,000 in 1999.  As a percentage of
outstanding serviced contracts, the loss ratios were .2% and .3% in 2000 and
1999, respectively.

     The Company incurred $5.0 million of costs in selling $98.5 million of
its finance contracts in 2000, as compared to $2.9 million of costs in selling
$77.0 million of such contracts in 1999.  The costs arise primarily from the
difference between the weighted-average interest rate on the contracts being
sold and the interest rate negotiated with the purchaser of the contracts.
The Company believes that it will be able to arrange sufficient capacity to
sell its finance contracts for the foreseeable future.

Accounting Pronouncements:
     The Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Investments and Hedging Activities" which was originally effective for fiscal
quarters of fiscal years beginning after June 15, 1999.  The statement, as
amended by SFAS No. 137 and 138, will be effective January 1, 2001 for the
Company.  Due to the Company s current limited use of derivative instruments,
the adoption of this statement will not materially effect the Company's
financial condition or results of operations.

Market Risk

     The Company is exposed to market risk from changes in interest rates as
well as fluctuations in currency.  See further disclosure relating to variable
rate debt under "Liquidity and Capital Resources - Borrowing Arrangements"
above.

     Interest Rate Risk:  The Company's line-of-credit facility is primarily
LIBOR-based and is subject to interest rate movements.  A 10% increase or
decrease in the average cost of the Company's variable rate debt would result
in a change in pre-tax interest expense of approximately $446,000 based upon
borrowings outstanding at December 31, 2000.

     Commodity Risk:  The Company is exposed to fluctuations in market prices
for commodities, especially steel.  Each one of the Company's business
segments is subject to commodity price risk as the prices for raw materials
change with movements in underlying commodity prices.  Therefore, the Company
has established various programs to manage the negotiations of commodity
prices.  In general, the Company enters into contracts with its vendors to
lock in commodity prices at various times and for various periods in order to
limit near-term exposure to fluctuations in raw material prices.

     Currency Risk:  The Company has limited exposure to foreign currency
exchange fluctuations.  Certain sales are made in Canadian dollars and Euros;
however, to minimize this exposure, the Company borrows in Canadian dollars
under its line-of-credit facility and, in limited circumstances, enters into
currency hedge transactions relative to Euro billings.

Outlook

Markets:
     The Company believes that, in general, the overall economics of its
markets will continue to be soft, especially through the first half of 2001.
Additionally, the Company expects that the general economic environment, for
at least the first half of 2001, will not differ substantially from that of
the second half of 2000, due to the interest rate increases experienced from
mid-1999 through 2000, relatively high fuel costs and an upward trend in
unemployment.  Although the Company anticipates that the current interest rate
environment should assist in stimulating economic growth, the Company does not
foresee significant improvement occurring in the construction equipment or
agricultural equipment markets until the second half of 2001, at the earliest.

     In the North American construction equipment sector, the Company expects
     the skid loader market, which has enjoyed double-digit growth in recent
     years, to continue to grow in 2001   but at a slower pace.  The Company
     expects the telescopic handler market to decline for the second straight
     year, perhaps in the range of 10% to 15%, due primarily to the continued
     downturn in residential and non-residential construction markets as the
     result of high interest rates in 1999 and 2000.  The North American
     compact excavator market, the growth of which the Company believes
     remains substantially behind the similar European market, shows prospects
     of increasing by 10% to 15% in 2001.

     In the North American agricultural equipment market, the industry faces
     an estimated 3% to 5% reduction in the number of dairy farms, as well as
     a continuation of low milk prices for a substantial portion of 2001.

     Internationally, the Company expects business in 2001 to remain at levels
     similar to those achieved in 2000.  The Company believes an opportunity
     exists for skid loader sales in Europe to increase, if the Euro continues
     to strengthen against the U.S. dollar.

Financial Guidance:
     Gehl Company is forecasting net sales to reach between $272 million and
$280 million in 2001, an increase of approximately 5% to 8% over 2000 net
sales levels.  Diluted earnings per share (EPS) for 2001 is forecast to be in
the $1.52 to $1.62 range.  In general, the Company does not foresee any
significant improvement in the overall economic environment until the second
half of 2001, at the earliest.  It is anticipated that a general improvement
in economic conditions will assist in bolstering the sales of new products
introduced in 2001 and second half shipments in general.  However, the Company
anticipates the full impact of certain strategic actions it is currently
undertaking will not be fully realized until 2002, and beyond, due to the
anticipated timing of the improvement in the economy and the natural time lag
associated with implementation of the strategic initiatives.

     In the construction equipment segment, the Company is forecasting 2001
net sales to be between $156 million and $160 million, an increase of
approximately 3% to 6% over the net sales levels realized in 2000.  The
increase is anticipated to occur primarily as the result of new model skid
loader shipments, e-commerce initiatives and increased shipments of compact
excavators and mini-loaders.  Offsetting these developments, the Company
expects a decrease in its telescopic handler shipments in similar proportion
to the anticipated overall market decline.

     In the agricultural equipment segment, the Company is forecasting 2001
net sales to be between $116 million and $120 million, an increase of
approximately 8% to 12% over the 2000 net sales levels.  The increase is
anticipated to occur primarily as the result of the new model round baler and
skid loader shipments, and an increase in shipments of compact equipment
(telescopic handlers, compact excavator and mini-loader products) to rural
equipment dealers which serve areas not currently covered by Gehl construction
dealers.

     Consolidated gross profit margin for 2001 is forecasted in the range of
26.1% to 26.6%, compared to the 2000 consolidated gross margin percentage of
26.4%.  The primary factors that could adversely affect margin include:  a)
anticipated limited price increases as a result of competitive market
conditions; b) a decrease in the percentage of shipments comprised of
telescopic handlers, typically a higher gross margin product; c) increased
shipment levels of compact excavators and mini-loaders, which have lower than
average gross margins due to the purchased finished goods nature of the
product; and d) reduced production levels at a number of construction
equipment manufacturing facilities in 2001 versus 2000.  Offsetting these
items are anticipated increased agricultural equipment production levels
(primarily round balers), and improved efficiencies expected at a number of
Company manufacturing facilities.

     Operating expenses are expected to rise slightly, as a percentage of net
sales, to the range of 18.0% to 18.4% for 2001.  Certain ongoing spending in
support of revenue enhancing projects, including e-commerce, distribution and
product development, service and parts consolidations, and the implementation
of enterprise resource planning (ERP) systems, are expected to continue.  In
addition, the very competitive market forces in both segments are expected to
result in higher requirements for certain sales-related expenses.

     Regarding 2002, the Company expects continued economic improvement and
continued rewards for the strategic initiatives implemented throughout 2001.
Specifically, the Company is expecting:

     Improved North American skid loader and telescopic handler markets;

     Better European markets for the skid loader product line;

     Continued acceptance, and full year impact, of products introduced during
     2001;

     Continued success of rural equipment dealers and Mustang dealers in
     selling compact equipment first available to these distribution channels
     in 2001;

     Continued growth of the compact excavator market at above average growth
     rates;

     Continued growth in sales of attachments; and

     Expanded web-based e-commerce business.

     The Company expects slightly improved gross margins and a lower
percentage of operating expenses to net sales for 2002, which should result in
EPS ranging from $2.10 to $2.30 per diluted share.

Forward-Looking Statements

     The Company intends that certain matters discussed in this Annual Report
(including in this section and the Chairman's letter) are "forward-looking
statements" intended to qualify for the safe harbor from liability established
by the Private Securities Litigation Reform Act of 1995.  All statements other
than statements of historical fact, including statements regarding the
Company's future financial position, business strategy, targets, projected
sales, costs, earnings and capital spending, and the plans and objectives of
management for future operations, are forward-looking statements.  When used
in this Annual Report, words such as the Company "believes," "anticipates,"
"expects" or "estimates" or words of similar meaning are generally intended to
identify forward-looking statements.  These forward-looking statements are not
guarantees of future performance and are subject to certain risks,
uncertainties, assumptions and other factors, some of which are beyond the
Company's control, that could cause actual results to differ materially from
those anticipated as of the date this Annual Report was printed.  Factors that
could cause such a variance include, but are not limited to, unanticipated
changes in general economic and capital market conditions, the Company's
ability to implement successfully its strategic initiatives, market acceptance
of newly introduced products, the cyclical nature of the Company's business,
the Company's and its customers' access to credit, competitive pricing,
product initiatives and other actions taken by competitors, disruptions in
production capacity, excess inventory levels, the effect of changes in laws
and regulations (including government subsidies and international trade
regulations), technological difficulties, changes in environmental laws, the
impact of any acquisition effected by the Company, and employee and labor
relations.  Shareholders, potential investors, and other readers are urged to
consider these factors in evaluating the forward-looking statements and are
cautioned not to place undue reliance on such forward-looking statements.  The
forward-looking statements included in this Annual Report are only made as of
the date of its printing, and the Company undertakes no obligation to
publicly update such forward-looking statements to reflect subsequent events
or circumstances.  In addition, the Company's expectations for fiscal years
2001 and 2002 are based in part on certain assumptions made by the Company,
including those relating to commodity prices, which are strongly affected by
weather and other factors and can fluctuate significantly, housing starts and
other construction activities, which are sensitive to, among other things,
interest rates and government spending, and the performance of the U.S.
economy generally. The accuracy of these or other assumptions could have a
material effect on the Company's ability to achieve its expectations.

<PAGE>

[Pages 18 through 28 of the Annual Report]

                         GEHL COMPANY AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS

 Assets
 In Thousands, Except Share Data - December 31,        2000          1999

 Cash                                               $  2,590     $  1,010
 Accounts receivable - net                            69,546       68,551
 Finance contracts receivable - net                   16,549       12,074
 Inventories                                          45,598       35,206
 Prepaid income taxes                                  8,078        8,431
 Prepaid expenses and other current assets               636          511
                                                    --------     --------
   Total current assets                              142,997      125,783
                                                    --------     --------
 Property, plant and equipment - net                  46,172       37,028
 Finance contracts receivable - net, non-current       9,967        7,311
 Intangible assets                                    13,086       15,706
 Other assets                                         10,496        8,332
                                                    --------     --------
 Total assets                                       $222,718     $194,160
                                                    ========     ========

 Liabilities and Shareholders' Equity
 Current portion of long-term debt obligations      $    187     $    519
 Accounts payable                                     26,645       25,077
 Accrued liabilities                                  23,195       30,703
                                                    --------     --------
   Total current liabilities                          50,027       56,299
                                                    --------     --------
 Line of credit facility                              51,608       22,038
 Long-term debt obligations                            9,277        9,059
 Deferred income taxes                                 5,096        3,949
 Other long-term liabilities                           3,692        5,391
                                                    --------     --------
   Total long-term liabilities                        69,673       40,437
                                                    --------     --------
 Common stock, $.10 par value, 25,000,000 shares
   authorized, 5,330,500 and 5,645,620 shares
   outstanding at December 31, 2000 and 1999,
   respectively                                          533          565
 Preferred stock, $.10 par value, 2,000,000
   shares authorized, 250,000 shares designated           --           --
 as Series A preferred stock, no shares issued
 Capital in excess of par                              6,495       11,294
 Retained earnings                                    96,124       86,468
 Accumulated other comprehensive loss                   (134)        (903)
                                                    --------     --------
 Total shareholders' equity                          103,018       97,424
                                                    --------     --------
 Total liabilities and shareholders' equity         $222,718     $194,160
                                                    ========     ========
 Contingencies (Notes 2 and 11)

 The accompanying notes are an integral part of the financial statements.
<PAGE>

                         GEHL COMPANY AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME


 In Thousands, Except Per Share Data -
   Year Ended December 31,                    2000        1999        1998
 Net sales                                 $258,118    $291,398    $267,646
   Cost of goods sold                       190,093     210,851     196,260
                                           --------    --------    --------
 Gross profit                                68,025      80,547      71,386
   Selling, general and administrative
    expenses                                 46,040      45,490      44,108
                                           --------    --------    --------
 Income from operations                      21,985      35,057      27,278

   Interest expense                          (4,741)     (3,083)     (4,026)
   Interest income                            1,760       1,555       1,655
   Other (expense) income, net               (4,148)     (2,235)     (1,235)
                                           --------    --------    --------
 Income before income taxes                  14,856      31,294      23,672

   Provision for income taxes                 5,200      11,109       8,404
                                           --------    --------    --------
 Net income                                  $9,956     $20,185     $15,268
                                           ========    ========    ========
 Diluted net income per common share        $  1.72     $  3.17     $  2.29
                                           ========    ========    ========
 Basic net income per common share          $  1.76     $  3.29     $  2.39
                                           ========    ========    ========

 The accompanying notes are an integral part of the financial statements.
<PAGE>

                         GEHL COMPANY AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

In Thousands     Total  Comprehensive  Retained   Accumulated  Common  Capital
                           Income      Earnings      Other     Stock     in
                                                 Comprehensive         Excess
                                                     Loss              of Par

Balance at
 December 31,
 1997          $ 77,573                $ 51,015     $ (382)    $ 621  $ 26,319

Comprehensive
Income:
  Net income     15,268    15,268        15,268
  Minimum
   pension
   liability
   adjustments,
   net of $415
   of taxes        (770)     (770)                    (770)
                           -------
   Comprehensive
    Income                $14,498
                          =======
   Exercise of
    stock
    options/
    warrant       1,652                                            23    1,629

    Other           382                                                    382
                 ------                 -------     -------     -----  -------
Balance at
 December 31,
 1998            94,105                  66,283     (1,152)       644   28,330

Comprehensive
 Income:
  Net income     20,185    20,185        20,185
   Minimum
   pension
   liability
   adjustments,
   net of $134
   of taxes         249       249                    249
                           ------
                          $20,434
                          =======
Exercise of
 stock options    1,070                                            14    1,056

Treasury
 stock
 purchase/
 cancellation   (18,523)                                          (93) (18,430)

Other               338                                                    338
                 ------                -------   -------        -----  -------
Balance at
 December 31,
 1999            97,424                 $86,468      (903)        565   11,294

Comprehensive
 Income:
  Net income      9,656     9,656         9,656
  Minimum
   pension
   liability
   adjustments,
   net of $134
   of taxes         769       769                     769
                          -------
Comprehensive
 Income                   $10,425
                          =======
Exercise of                                                         7      519
 stock options      526

Treasury
 stock
 purchase/
 cancellation    (5,924)                                          (39)  (5,885)

Other               567                                                    567
                 ------                  -------   -------       ----- -------
Balance at
 December 31,
 2000          $103,018                   $96,124    $ (134)      $533   $6,495
                =======                   =======   ========     ===== =======

    The accompanying notes are an integral part of the financial statements.


                            GEHL COMPANY AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS


 In Thousands - Year Ended
    December 31,                           2000       1999      1998
 Cash Flows from Operating Activities

 Net income                             $ 9,656   $ 20,185    $ 15,268
 Adjustments to reconcile net income
  to net cash provided by
  operating activities:

   Depreciation                           4,885      4,329       3,941
   Amortization                             849        782         807
   (Gain) loss on sale of equipment        (863)       (46)          2
   Cost of sales of finance contracts     4,990      2,911       1,088
   Deferred income taxes                    121     (1,421)       (177)
   Proceeds from sales of finance
    contracts                            93,485     74,128      54,267
   Increase (decrease) in cash
    due to changes in:
     Accounts receivable - net             (995)     2,255       1,384
     Finance contracts receivable -
      net                              (105,606)   (80,834)    (59,704)
     Inventories                        (10,392)    (3,113)     (1,808)
     Prepaid expenses and other
      current assets                       (125)       843          70
     Other assets                           520        542         377
     Accounts payable                     1,568      1,515       1,350
     Accrued liabilities                 (5,225)     2,888       4,502
                                        -------    -------    --------
       Net cash provided by
        operating activities             (7,132)    24,964      21,367
                                        -------    -------    --------
 Cash Flows from Investing Activities
 Property, plant and equipment
  additions                             (12,577)    (7,281)     (3,051)
 Proceeds from sale of equipment            942        112          13
 (Increase) decrease in other assets     (4,189)    (2,713)       (663)
                                        -------    -------    --------
       Net cash (used for) investing
        activities                      (15,824)    (9,882)     (3,701)
                                        -------    -------    --------
 Cash Flows from Financing Activities
 Proceeds from(repayment of)
  revolving credit loans                 29,570      2,679     (19,998)
 Decrease in other
   long-term obligations                   (274)      (607)       (176)
 Increase in other long-
   term liabilities                         638        422         504
 Proceeds from issuance of common
   stock                                    526      1,070       1,652
 Purchase of stock warrant                    -          -           -
 Treasury stock purchase                 (5,924)   (18,523)          -
                                        -------    -------    --------
 Net cash (used for) provided by
  financing activities                   24,536    (14,959)    (18,018)
                                        -------    -------    --------

 Net increase (decrease) in cash          1,580        123        (352)
 Cash, beginning of year                  1,010        887       1,239
                                        -------    -------    --------
 Cash, end of year                      $ 2,590    $ 1,010    $    887
                                       ========   ========    ========
 The accompanying notes are an integral part of the financial statements.
<PAGE>

Note 1 - Significant Accounting Policies
Consolidation: Gehl Company is engaged in the manufacture and distribution of
equipment and machinery for the construction market, and in the manufacture
and distribution of equipment and machinery primarily for the dairy, livestock
and poultry agricultural sector.  The consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries:
Hedlund Martin, Inc.; Gehl Power Products, Inc.; Mustang Manufacturing Company,
Inc. (Mustang); and Gehl International, Inc., a foreign sales corporation.
All significant intercompany transactions and balances are eliminated.

Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions, in certain circumstances, that affect the reported amounts of
assets and liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting period.
Ultimate realization of assets and settlement of liabilities in the future
could differ from those estimates.

Revenue Recognition: Revenue is recorded upon the shipment of products to
dealers and distributors; these dealers and distributors have no right of
return, except as provided by law.

Shipping and Handling Fees and Costs:  During the fourth quarter of 2000, the
Company adopted the provisions of the Emerging Issues Task Force ("EITF")
Issue No. 00-10 "Accounting for Shipping and Handling Fees and Costs." In
accordance with the provisions of EITF 00-10, certain shipping and handling
fees and costs which the Company had previously recorded on a net basis as a
component of selling, general and administrative expenses are reflected in net
sales and cost of goods sold, as appropriate.

Accounts Receivable:  The Company provides financing for its dealers in both
the construction and agricultural markets.  The financing agreements provide
for, in certain instances, interest-free periods which generally range from 4
to 9 months.

Finance Contracts Receivable: The Company offers financing for its products to
retail customers and to its dealers.  Finance contracts require periodic
installments of principal and interest over periods of up to 60 months.
Unearned interest is recognized over the life of the contracts using the sum
of the digits method. Principal expected to be collected within twelve months
of the balance sheet date is classified as a current asset; the remainder is
classified as a non-current asset.

Inventories: Inventories are valued at the lower of cost or market. Cost is
determined by the last-in, first-out (LIFO) method for substantially all of
the Company's inventories.

Properties and Depreciation:  Properties are stated at cost. When properties
are sold or otherwise disposed of, cost and accumulated depreciation are
removed from the respective accounts and any gain or loss is included in
income. The Company provides for depreciation of assets generally using the
straight-line method for financial reporting purposes and accelerated methods
for income tax purposes. Depreciation is generally recorded using the
following estimated useful lives for financial statement purposes:

                                         Years
Buildings                             25-31.5
Machinery and equipment                  7-12
Autos and trucks                          3-5
Office furniture and fixtures             3-5

Expenditures which substantially increase value or extend asset lives are
capitalized.  Expenditures for maintenance and repairs are charged against
income as incurred.

Debt Issue Costs: Costs incurred in conjunction with incurrence of
indebtedness are capitalized and subsequently amortized over the related
periods of the obligations.

Intangible Assets: The cost in excess of the fair market value of net assets
acquired (goodwill) is being amortized on the straight-line basis over 30
years. A five year non-compete agreement with the former owners of Mustang is
being amortized on the straight-line basis over the life of the agreement.
Accumulated amortization of intangible assets at December 31, 2000 and 1999 is
$2.5 million and $1.7 million, respectively. Unamortized goodwill, as well
as other long-lived assets, are reviewed periodically for potential
impairment.

Foreign Currency Transactions: Foreign currency transaction gains and losses
are included in the determination of income.  Foreign currency losses were
$252,000, $15,000 and $130,000 in 2000, 1999 and 1998, respectively.

Income Taxes: The Company follows the liability method in accounting for
income taxes. The liability method provides that deferred tax assets and
liabilities be recorded based on the difference between the tax bases of
assets and liabilities and their carrying amounts for financial reporting
purposes.

Product Liability Costs:  The Company directly assumes all liability for costs
associated with claims up to specified limits in any policy year. Known
incidents involving the Company's products are investigated and reserves are
established for any estimated liability.

Product Warranty Costs:  In general, the Company provides warranty on
equipment for a period of up to twelve months or for a specified period of use
after sale or rental by the dealer. Reserves for estimated warranty costs are
established at the time of sale.

Environmental Costs: Environmental expenditures that relate to current
operations are expensed or capitalized as appropriate. Expenditures that
relate to an existing condition caused by past operations, and that do not
contribute to current or future revenue generation, are expensed. Liabilities
are recorded when environmental assessments and/or remedial efforts are
probable, and the costs can be reasonably estimated.

Research and Development Costs: Costs for research activities relating to
product development and improvement are charged against income as incurred.
Such costs amounted to approximately $3.1 million, $3.0 million and $2.8
million in 2000, 1999 and 1998, respectively.

Other (Expense) Income: Other (expense) income is comprised primarily of
foreign currency transaction gains (losses), cost of sales of finance
contracts, and other nonoperating items.

Accounting Pronouncements: The Financial Accounting Standards Board (FASB) has
issued Statement of Financial Accounting Standards (SFAS) No. 133 "Accounting
for Derivative Instruments and Hedging Activities" which was originally
effective for fiscal quarters of fiscal years beginning after June 15, 1999.
The statement, as amended by SFAS No. 137 and 138, will be effective January
1, 2001 for the Company. Due to the Company's current limited use of
derivative instruments, the adoption of this statement will not materially
effect the Company's financial condition or results of operations.

Reclassification: As a result of adopting EITF 00-10, the Company has restated
previous quarters of 2000 and previous year's financial information to reflect
comparable reporting of shipping and handling fees and costs.

Note 2 - Accounts Receivable and Finance Contracts Receivable
Accounts receivable and finance contracts receivable were comprised of the
following (in thousands):

 December 31,                     2000         1999

 Accounts receivable            $74,069      $72,999

 Less allowances for:
   doubtful accounts            (1,864)      (1,687)
   returns and dealer
    discounts                   (2,659)      (2,761)
                                -------      -------
                                $69,546      $68,551
                                =======      =======

 Finance contracts receivable   $31,417      $23,285

 Less: unearned interest        (2,940)      (2,396)
       allowance for doubtful
        accounts                (1,961)      (1,504)
                                ------       ------
                                26,516       19,385

 Less: non-current portion      (9,967)      (7,311)
                                ------       ------
   Current portion            $ 16,549     $ 12,074
                               =======      =======

The finance contracts receivable at December 31, 2000 have a weighted-average
interest rate of approximately 7.3%.

The Company has entered into various agreements with third parties to sell
with recourse certain finance contracts receivable. The finance contracts
require periodic installments of principal and interest over periods of up to
60 months; interest rates are based on market conditions. The Company has
retained the servicing of substantially all of these contracts which generally
have maturities of 12 to 60 months.  Amounts to cover potential losses on
these sold receivables are included in the allowance for doubtful accounts.

The following summarizes the Company's sales of retail finance contracts
receivable during 2000 and 1999
(in thousands):


                                  2000        1999

 Value of contracts sold
   - net of $8.3 million and
   $6.1 million, respectively,
   of unearned interest         $98,475      $77,039

 Cash received on sales of
   contracts                     93,485       74,128
                                -------      -------
 Cost of sales of finance
   contracts                    $ 4,990      $ 2,911
                                =======      =======

 Net receivables outstanding
   at December 31 relating
   to finance contracts sold   $121,649      $90,331
                                =======      =======

The Company retains as collateral a security interest in the equipment
associated with accounts receivable and unsold finance contracts receivable.
The Company also maintains certain levels of dealer recourse deposits as
additional security associated with finance contracts receivable.

Note 3 - Inventories
If all of the Company's inventories had been valued on a current cost basis,
which approximates FIFO value, estimated inventories by major classification
would have been as follows (in thousands):

 December 31,                      2000             1999
 Raw materials and supplies      $ 17,689         $ 17,371

 Work-in-process                    4,995            5,767

 Finished machines and parts       42,525           31,263
                                 --------         --------
 Total current cost value          65,209           54,401
 Adjustment to LIFO basis         (19,611)         (19,195)
                                 --------         --------
                                 $ 45,598         $ 35,206
                                 ========         ========

Note 4 - Property, Plant and Equipment - Net
Property, plant and equipment consisted of the following
(in thousands):

 December 31,                         2000           1999

 Land                              $  1,831       $  1,838
 Buildings                           31,921         28,202
 Machinery and equipment             48,198         42,389
 Autos and trucks                       360            256
 Office furniture and fixtures       11,821          9,282
                                   --------       --------
                                     94,131         81,967
 Less:  accumulated
   depreciation                     (47,959)       (44,939)
                                   --------       --------
 Property, plant and
   equipment - net                 $ 46,172       $ 37,028
                                   ========       ========

Note 5 - Debt Obligations
A summary of the Company's debt obligations, and related current maturities, is
as follows (in thousands):


 December 31,                                     2000        1999

 Line of credit facility                        $51,608      $22,038
 9.0% industrial development bonds                8,400        8,400
 Other debt obligations                           1,064        1,178
                                                -------      -------
                                                 61,072       31,616
 Less: current portion                             (187)        (519)
                                                -------      -------
 Long-term debt obligations                     $60,885      $31,097
                                                =======      =======

The Company maintains a $75 million line of credit facility (the "Facility")
which expires December 31, 2002. Interest is paid monthly on outstanding
borrowings under the Facility as follows:  borrowings in Canadian denominated
dollars up to a $5.5 million credit line are at 2.5% above the Canadian one-
month bankers' acceptance rates; the remainder of the borrowings are in U.S.
dollars and are at 2.0% above the London Interbank Offered Rate for one-month
deposits (LIBOR).  Under the Facility, $25 million is tied to a borrowing base
related to the Company's finance contracts receivable and inventories. The
remaining availability is tied to a borrowing base related to the Company's
accounts receivable. Borrowings under the Facility are secured by finance
contracts receivable, inventories and accounts receivable.

At December 31, 2000, the Company had unused borrowing capacity of
approximately $20.2 million under the Facility.  The Facility also includes
financial covenants requiring the maintenance of a minimum tangible net worth
level and a maximum debt to equity ratio.

The 9% industrial development bonds are secured by the Company's Lebanon,
Pennsylvania manufacturing facility and require principal repayment in six
equal annual installments of $1.4 million commencing in 2005.  The Company has
established a debt reserve fund of approximately $595,000 until the first
mandatory bond redemption period in 2003. The debt reserve fund was
established with remaining funds in the trustee-controlled unexpended plant
construction fund and interest subsequently earned.  Financial covenants
related to the industrial development bonds require the maintenance of a
minimum tangible net worth level and a maximum debt to equity ratio.

Annual maturities of debt obligations are as follows
(in thousands):

 2001         $   187
 2002          51,761
 2003             534
 2004             122
 2005           1,468
 Later years    7,000
              -------
              $61,072
              =======

Interest paid on total debt obligations was $4.5 million, $3.0 million and
$4.1 million in 2000, 1999 and 1998, respectively.

Note 6 - Accrued Liabilities
Accrued liabilities were comprised of the following
(in thousands):

 December 31,                          2000          1999
 Accrued salaries and wages       $ 4,095        $ 6,728
 Dealer recourse deposits           2,648          2,418
 Accrued warranty costs             4,787          5,796
 Accrued product liability costs    3,409          3,760
 Accrued income taxes               1,165          3,225
 Other                              7,091          8,776
                                  -------        -------
                                  $23,195        $30,703
                                  =======        =======

Note 7 - Income Taxes
The income tax provision recorded for the years ended December 31, 2000, 1999
and 1998 consisted of the following (in thousands):


 Year Ended
 December 31,     Federal      State      Total

 2000  Current   $ 4,577        $ 502   $ 5,079
       Deferred      121            -       121
                 -------        -----   -------
       Total     $ 4,698        $ 502   $ 5,200
                 =======       ======   =======
 1999  Current   $12,080        $ 450   $12,530
       Deferred   (1,421)           -    (1,421)
                 -------       ------   -------
       Total     $10,659       $  450   $11,109
                 =======       ======   =======
 1998  Current   $ 8,232       $  349   $ 8,581
       Deferred     (177)          -       (177)
                 -------       ------   -------
       Total     $ 8,055      $   349   $ 8,404
                 =======       ======   =======

A reconciliation between the reported income tax provision and the federal
statutory rate follows (as a percent of pre-tax income):

 Year Ended December 31,          2000    1999     1998

 Federal statutory rate          35.0%    35.0%    35.0%
 State income taxes, net of
  Federal income tax effect       2.2       .9      1.0
 Other, net                      (2.2)     (.4)     (.5)
                                ------    -----    -----
                                 35.0%    35.5%    35.5%
                                ======    =====    =====

The Company's temporary differences and carryforwards which give rise to
deferred tax assets and liabilities consisted of the following (in thousands):
The net asset is included in the consolidated balance sheet in the following
captions (in thousands):

 December 31,                        2000        1999
   Accrued expenses and reserves   $7,103      $8,237
   Asset valuation reserves         1,960       1,693
   Operating loss carryforwards       229         251
   Tax credit carryforwards           343         309
   Installment sales                 (945)     (1,417)
   Property, plant and equipment   (3,009)     (2,936)
   Pension benefits                (2,006)       (933)
   Other, net                        (121)       (176)
   Valuation allowance               (572)       (546)
                                 --------    --------
    Net deferred tax asset       $  2,982    $  4,482
                                 ========    ========

 The net asset is included in the consolidated balance
 sheet in the following captions (in thousands):

 December 31,                        2000        1999

   Prepaid income taxes            $8,078      $8,431
   Deferred income taxes           (5,096)     (3,949)
                                   ------      ------
                                 $  2,982    $  4,482
                                   ======      ======

At December 31, 2000, the Company had state net operating loss carryforwards
of $4.4 million which will be available for the reduction of future income tax
liabilities. A valuation allowance has been recorded against these
carryforwards for which utilization is uncertain.

Cash paid related to income taxes during 2000, 1999 and 1998 was $6.6 million,
$11.9 million and $7.0 million, respectively.

Note 8 - Employee Retirement Plans
The Company sponsors two qualified defined benefit pension plans for certain
of its employees.  The following schedules set forth a reconciliation of the
changes in the plans' benefit obligation and fair value of plan assets and
a statement of the funded status (in thousands):

 Reconciliation of benefit obligation:
                                                     2000        1999

 Obligation at beginning of year                  $ 30,429     $ 29,953
 Service cost                                          573          573
 Interest cost                                       2,430        2,107
 Actuarial (gain)                                     (207)        (392)
 Benefit payments                                   (1,931)      (1,812)
                                                  --------     --------
 Obligation                                       $ 31,294     $ 30,429

 Reconciliation of fair value of plan assets:

 Fair value of plan assets at beginning of year   $ 28,073     $ 27,087
 Actual return on plan asset                         4,793        2,210
 Employer contributions                              2,401          588
 Benefit payments                                   (1,931)      (1,812)
                                                   -------      -------
 Fair value of plan assets                        $ 33,336     $ 28,073

 Funded Status:
 Funded status at end of year                     $  2,042     $(2,356)
 Unrecognized prior service cost                       949       1,099
 Unrecognized loss                                   2,378       4,746
                                                  --------    --------
 Net amount recognized at December 31             $  5,369     $ 3,489

The following  table provides  the amounts  recognized in the
statement of financial position (in thousands):

 December 31,                                     2000            1999
 Prepaid benefit cost                         $  5,369        $  3,489
 Accrued benefit liability                           -          (1,028)
 Intangible asset                                    -              26
 Accumulated other
 comprehensive loss                                  -           1,002
                                               -------         -------
 Net amount recognized at December 31         $  5,369        $  3,489


The following table provides disclosure of Net Periodic Benefit Cost (in
thousands):

 Year Ended December 31,           2000          1999          1998

 Service cost                   $   573       $   573       $   525
 Interest cost                    2,430         2,107         2,037
 Expected return on plan
 assets                          (2,631)       (2,398)       (2,244)
 Amortization of transition           -             -          (272)
 assets
 Amortization of prior service
 cost                               149           149           149
 Amortization of net loss             -           154           126
                                -------       -------       -------
 Net periodic benefit cost      $   521       $   585       $   321

The assumptions used in the measurement of the Company's benefit obligation
are shown in the following table:

                                  2000            1999
Weighted-average assumption as
 of September 30:
 Discount rate                    8.25%           8.25%
 Expected return on plan assets   9.00%           9.00%
 Rate of compensation increases   4.00%           4.00%

The projected benefit obligation, accumulated benefit obligation, and fair
value of plan assets for the plan having accumulated benefit obligations in
excess of plan assets were $16.0 million, $14.2 million and $13.4 million,
respectively, as of December 31, 1999.

The measurement date used for each of the actuarial calculations was September
30.  Plan assets consist principally of common stocks and fixed income
investments.  Funding for the plans equals or exceeds the minimum requirements
of the Employee Retirement Income Security Act of 1974.

In addition, the Company maintains a non-qualified supplemental retirement
benefit plan for certain management employees. The accumulated benefit
obligation for this plan was $2.1 million and $1.8 million at December 31,
2000 and 1999, respectively, using a discount rate of 7.75% in 2000 and 8.25%
in 1999. During 2000, the Company established a Rabbi Trust and contributed
$1.6 million into the Trust with the assets designated for the above plan.

The Company maintains a savings and profit sharing plan.  The Company matches
50% of non-bargaining unit employee contributions to the plan not to exceed 6%
of the employees annual compensation.  Vesting of Company contributions occur
at the rate of 20% per year.  Contributions approximated $639,000, $632,000
and $577,000 in 2000, 1999 and 1998, respectively.

The Company maintains a defined contribution plan that covers certain
employees not covered by a defined benefit plan. The Company contributes
various percentages of eligible employee compensation (as defined therein);
the plan does not allow employee contributions. The Company contributed
approximately $346,000, $407,000 and $329,000 in connection with this plan in
2000, 1999 and 1998, respectively.

The Company provides postretirement benefits to certain retirees in two areas:
a $2,500 life insurance policy for retired office employees and subsidized
health insurance benefits for early retirees prior to their attaining age 65.
The number of retirees associated with postretirement benefit costs is
approximately 200.

The following schedules set forth a reconciliation of the changes in the
postretirement plan's benefit obligation and funded status (in thousands):

December 31,                              2000        1999
Reconciliation of benefit obligation:
Obligation at beginning of year         $1,717      $1,507
Service cost                                59          59
Interest cost                              129         127
Actuarial loss                               5         181
Benefit payments                          (168)       (157)
                                        ------     -------
Obligation                              $1,742      $1,717

Funded status:
Funded status at end of year           $(1,742)    $(1,717)
Unrecognized transition obligation         271         293
Unrecognized loss                          809         842
                                       -------     -------
Net amount recognized                  $  (662)    $  (582)

The following table provides disclosure of the net periodic benefit cost (in
thousands):

Year ended December 31,                   2000       1999       1998
Service cost                            $   59       $ 59       $ 40
Interest cost                              129        127        110
Amortization of transition obligation       23         23         23
Amortization of net loss                    37         50         37
                                          ----       ----       ----
Net periodic benefit cost               $  248       $259       $210

The assumed health care cost rate trend used in measuring the accumulated
postretirement benefit obligation at December 31, 2000 was 6% decreasing to 5%
over four years and at December 31, 1999 was 7% decreasing to 5% over four
years.  The discount rate used in determining the accumulated postretirement
obligation was 7.75% in 2000, 8.25% in 1999 and 7.25% in 1998.

Assumed health care cost trend rates have a significant effect on the amounts
reported for the health care plans. A 1% change in assumed health care cost
trend rates would have the following effects (in thousands):

 December 31,              1% Increase  1% Decrease
 Effect on total of
 service and interest
 cost components of net
 periodic postretirement
 health care benefit cost     $  19       $  (16)

 Effect on the health
 care component of the
 accumulated
 postretirement benefit
 obligation                   $ 120       $  (98)


Note 9 - Shareholders' Equity
During April 2000, the 2000 Equity Incentive Plan was adopted, which
authorized the granting of awards for up to 600,000 shares of the Company's
common stock. An award is defined within the 2000 Equity Incentive Plan as a
stock option, stock appreciation right, restricted stock or performance share.
In April 1996, the 1995 Stock Option Plan was adopted, which authorized the
granting of options for up to 600,000 shares of the Company's common stock.
The Plans provide that options be granted at an exercise price not less than
fair market value on the date the options are granted and that the options
generally vest ratably over a period not exceeding three years after the grant
date. The option period shall not be more than ten years after the grant date.

Following is a summary of activity in the Plans for 1998, 1999 and 2000:


                                    Shares     Weighted
                                    Subject     Average
                                   to Option    Option
                                                 Price

 Outstanding, January 1, 1998     643,405      $9.58
   Granted                        117,750      14.54
   Exercised                      (92,359)      7.67
   Cancelled                      (13,002)      8.61
                                 --------     ------
 Outstanding, December 31, 1998   655,794     $10.76
   Granted                        119,500      18.71
   Exercised                     (135,992)      7.72
   Cancelled                      (31,668)     16.73
                                 --------     ------
 Outstanding, December 31, 1999   607,634     $12.69
   Granted                        268,500      12.60
   Exercised                      (76,222)      7.38
   Cancelled                      (18,835)     18.83
                                 --------     ------
 Outstanding, December 31, 2000   781,077     $13.03
                                 ========     ======

 Exercisable, December 31, 2000   407,316     $12.15
                                 ========     ======

The exercise price for options outstanding at December 31, 2000 range from
$6.25 to $22.50 per share. The weighted- average remaining contractual life of
these options approximates seven years.

The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation".  Accordingly, no compensation cost
has been recognized for options granted under the stock option plans.  Had
compensation cost been determined based on the fair value at the grant date
for awards in 1998, 1999 and 2000 consistent with the provisions of SFAS No.
123, the Company's pro-forma net income and earnings per share would have been
as presented below (in thousands, except per share data):


 For the year ended December 31,         2000     1999     1998

 Net income                            $9,241  $19,820  $14,831
 Diluted net income per share            1.65     3.12     2.23
 Basic net income per share              1.69     3.24     2.33

The fair value of each option granted is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 2000, 1999 and 1998:


 For the year ended December 31,        2000      1999       1998

 Expected stock price volatility       34.1%     25.9%      19.7%
 Risk-free interest rate                5.3%      6.3%       4.8%
 Expected life of options - years         7         7          7

The weighted-average grant-date fair value of options granted during 2000,
1999 and 1998 was $5.95, $8.21 and $5.13, respectively.

In March 2000, the Company's Board of Directors authorized a repurchase plan
providing for the repurchase of up to 325,000 shares of the Company's
outstanding common stock. As of December 31, 2000, 271,900 shares had been
repurchased in the open market under this authorization at an aggregate cost
of $3.8 million. In March 1999, a repurchase plan relating to up to 325,000
shares of the Company's outstanding common stock was authorized. All of the
authorized shares under that plan have been repurchased at an aggregate cost
of $5.8 million. In addition, in July 1999, the Board authorized a specific
repurchase from an individual shareholder. During 1999 pursuant to these
authorizations, the Company repurchased an aggregate of 930,500 shares of its
common stock at a cost of approximately $18.5 million. All treasury stock
acquired by the Company has been cancelled and returned to the status of
authorized but unissued shares.

On May 28, 1997, the Board of Directors of the Company adopted a Shareholder
Rights Plan and declared a rights dividend of one preferred share purchase
right ("Right") for each share of common stock outstanding on June 16, 1997,
and provided that one Right would be issued with each share of common stock
thereafter issued. The Shareholder Rights Plan provides that in the event a
person or group acquires or seeks to acquire 15% or more of the outstanding
common stock of the Company, the Rights, subject to certain limitations, will
become exercisable. Each Right once exercisable initially entitles the holder
thereof (other than the acquiring person whose rights are cancelled) to
purchase from the Company one one-hundredth of a share of Series A preferred
stock at an initial exercise price of $55 per one one-hundredth of a share
(subject to adjustment), or, upon the occurrence of certain events, common
stock of the Company or common stock of an "acquiring company" having a market
value equivalent to two times the exercise price. Subject to certain
conditions, the Rights are redeemable by the Board of Directors for $.01 per
Right and are exchangeable for shares of common stock. The Rights have no
voting power and expire on May 28, 2007.

Note 10 - Earnings Per Share
Basic net income per common share is computed by dividing net income by the
weighted-average number of common shares outstanding for the period. Diluted
net income per common share is computed by dividing net income by the
weighted-average number of common shares and, if applicable, common stock
equivalents which would arise from the exercise of stock options and warrants.
A reconciliation of the shares used in the computation follows (in thousands):


 Year Ended December 31,               2000       1999       1998
 Basic shares                         5,475      6,126     6,376
 Effect of warrants and options         132        233       286
                                      -----      -----     -----
 Diluted shares                       5,607      6,359     6,662

Note 11 - Contingencies
The Company is involved in litigation of which the ultimate outcome and
liability to the Company, if any, is not presently determinable.  Management
believes, based in part on the advice of counsel, that final disposition of
such litigation will not have a material impact on the Company's results of
operations or financial position.

Note 12 - Segment Information
The Company has two segments, construction equipment and agriculture
equipment, as the long-term financial performance of these segments is
affected by separate economic conditions and cycles. Segment net sales and
income from operations tend to be aligned with the distribution networks of
the Company, and correlate with the manner in which the Company evaluates
performance.

Construction equipment is manufactured and distributed for customers in the
construction market. Products include a diversified offering of skid loaders,
telescopic handlers, compact excavators, mini-loaders and paving equipment. As
of December 31, 2000, 50% of the Company's accounts receivable were from
customers in the construction market.

Agriculture equipment is manufactured and distributed for customers in the
dairy, livestock and poultry agricultural sectors. The products are comprised
primarily of skid loaders and equipment for haymaking, forage harvesting,
feed making and manure handling.  As of December 31, 2000, 50%
of the Company's accounts receivable were from customers in the agricultural
sector.  Unallocated assets are cash, deferred income taxes and other assets
not identified with the Company's segments.

 Year Ended December 31,       2000        1999         1998

 Net Sales
  Construction             $151,130     $173,607     $159,228
  Agriculture               106,988      117,791      108,418
                           --------     --------     --------
   Consolidated            $258,118     $291,398     $267,646
                           ========     ========     ========
 Income from
   Operations

  Construction             $ 14,028     $ 23,661     $ 19,384
  Agriculture                 7,957       11,396        7,894
                           --------     --------     --------
   Consolidated            $ 21,985     $ 35,057     $ 27,278
                           ========     ========     ========

 Assets
  Construction            $ 119,822    $ 102,298     $ 92,472
  Agriculture                83,283       76,803       77,766
  Unallocated                19,613       15,059       14,309
                           --------     --------     --------
   Consolidated            $222,718     $194,160     $184,547
                           ========     ========     ========

 Depreciation/
   Amortization

  Construction             $  3,155     $  2,992     $  2,687
  Agriculture                 2,552        2,092        2,033
  Unallocated                    27           27           28
                           --------     --------     --------
   Consolidated            $  5,734     $  5,111     $  4,748
                           ========     ========     ========
 Capital Expenditures

  Construction             $  6,523     $  3,852     $  1,827
  Agriculture                 6,054        3,429        1,224
                           --------     --------     --------
   Consolidated           $  12,577     $  7,281     $  3,051
                           ========     ========     ========

Exports of U.S. produced products were approximately $34.4 million, $39.8
million and $41.4 million in 2000, 1999 and 1998, respectively.

Note 13   Quarterly Financial Data (unaudited)


 In Thousands,
 Except Per        First       Second       Third      Fourth
 Share Data       Quarter     Quarter      Quarter     Quarter      Total
 2000

 Net sales      $72,054      $79,080     $54,837     $52,147     $258,118
 Gross profit    19,282       21,396      14,569      12,778       68,025
 Net income       4,069        5,129         188         270        9,656

 Diluted net
  income per
  common share      .70          .90         .03         .05         1.72
 Basic net
  income per
  common share (1)  .73          .93         .03         .5          1.76

 1999
 Net sales       $70,341     $85,348     $71,351    $64,358      $291,398
 Gross profit     18,903      24,169      20,581     16,894        80,547
 Net income        3,504       6,772       6,101      3,808        20,185

 Diluted net
 income per
 common share        .52        1.01        1.00        .64          3.17
 Basic net
 income per
 common share (1)    .54        1.05        1.04        .67          3.29


(1) Due to the use of the weighted-average shares outstanding each quarter for
computing net income per share, the sum of the quarterly per share amounts does
not equal the per share amounts for the year.


 Dollars in         2000        1999        1998       1997          1996
 Thousands, Except
 Per Share Data
 Summary of
 Operations
 Net sales (1)    $258,118     $291,398      $267,646    $200,996     $162,855
 Gross profit (1)   68,025       80,547        71,386      57,903       47,810
 Income from
  operations        21,985       35,057        27,278      21,848       15,547
 Interest
  expense            4,741        3,083         4,026       2,325        3,443
 Income before
  income taxes      14,856       31,294        23,672      20,060       12,494
 Net income          9,656       20,185        15,268      12,761        9,565


 Financial
 Position at
 December 31
 Current assets   $142,997     $125,783      $121,894    $117,841      $89,748
 Current
  liabilities       50,027       56,299        52,152      44,328       32,136
 Working
  capital           92,970       69,484        69,742      73,513       57,612
 Accounts
  receivable        69,546       68,551        70,806      72,190       55,141
 Finance
  contracts
  receivable        26,516       19,385        15,590      11,241        8,161
 Inventories        45,598       35,206        32,093      30,340       18,642
 Property,
 plant and
 equipment, net     46,172       37,028        34,142      35,082       21,678
 Total assets      222,718      194,160       184,547     176,223      120,125
 Long-term debt     60,885       31,097        28,947      49,046       19,194
 Total debt         61,072       31,616        29,544      49,718       19,372
 Shareholders'
  equity           103,018       97,424        94,105      77,573       64,832

 Common Share
 Summary
 Diluted net
 income per share    $1.72        $3.17         $2.29       $1.95        $1.54
 Basic net income
  per share           1.76         3.29          2.39        2.06         1.56
 Dividends per
 share                  --           --            --          --           --
 Book value per
 share               19.33        17.26         14.61       12.49        10.53
 Shares
 outstanding at
 year-end        5,330,500    5,645,620     6,438,945   6,212,686    6,158,720

 Other Financial
 Statistics
 Capital
  expenditures      12,577        7,281         3,051       8,718        3,837

 Depreciation        4,885        4,329         3,941       2,955        2,438
 Current ratio    2.9 to 1     2.2 to 1      2.3 to 1    2.7 to 1     2.8 to 1
 Percent total
 debt to total
 capitalization       37.2%       24.5%         23.9%       39.1%        23.0%
 Net income as a
 percent of net
 sales                 3.7%        6.9%          5.7%        6.4%         5.9%
 After-tax return
 on average
  shareholders'
  equity              9.6%        21.1%         17.8%       17.9%        15.9%
 Employees at
 year-end              976       1,118         1,127       1,192           832
 Common stock
 price range      20-8 7/8   23-1/2-14     22-1/2-11  24-15/16-9-3/8  12-6-7/8


(1) Amounts have been reclassified to reflect the adoption of Emerging Issue
Task Force No. 00-10, "Accounting for Shipping and Handling Fees and Costs".

Investor Information
Stock Prices and Dividends
                           Price Range                    Dividends
                        2000           1999            2000        1999

 First Quarter     $20 - 15 3/8    $18-1/8 - 14       $ --        $ --
 Second Quarter     20 - 13 1/2     23     - 14 1/8     --          --
 Third Quarter  15-1/2 -  9 1/2     23-1/2 - 17 1/8     --          --
 Fourth Quarter 16-7/8 -  8-7/8   19-11/16 - 16-5/8     --          --
                ---------------  ------------------   ----        ----
 Year          $20     -  8 7/8    $23-1/2 - 14       $ --        $ --
               ================  ==================   ====        ====